The quality of those applying for franchises in the residential property marketing sector has improved exponentially in recent years '“ and these days those involved in selecting franchisees often find themselves dealing with highly qualified and highly successful candidates.
This was said recently by Tony Clarke, MD of the Rawson Properties group.
'History,' said Clarke, 'will show that South Africas property sector underwent a total transformation, a massive improvement, in the first decade of the 21st Century '“ and that franchising played a big role in bringing this about'
The rise in the standard of franchisee applicants, said Clarke, can be attributed to
· the huge 'cleanout' of staff at the major corporations, often accompanied by downscaling and black empowerment initiatives;
· the growing realisation that, even though it has taken a pounding, the real estate sector remains a safe haven in todays economy; and
· the willingness on the part of the Estate Agency Affairs Board and Services SETA to give significant credits in their educational programmes to new recruits with existing academic and other qualifications.
'Franchising,' said Clarke, 'can be defined as a system which allows a new organisation to make use of, and benefit from, proven established business models.
'Its big advantages '“ and this can be proved by statistics '“ are that it usually enables the start-up organisation to become established quicker and to be more professional in both the short and long term than the enterprise which has started from scratch and has had to build its own brand name and reputation'
FASA, the Franchising Association of South Africa (who were part sponsors recently of a franchise expo held at the Sandton Convention Centre in the northern suburbs of Johannesburg, which was attended by several thousand potential franchise buyers) have, said Clarke, shown that whereas only ±50% of new businesses survive their first year and ±25% their second year, franchising operations have a far higher success rate: ±70% come through the first two years and ±50% are still in existence a decade later.
'Working under an established brand,' he said, 'enables the new entrepreneur to attract good staff more easily. It also facilitates access to funding.
'More importantly, however, it gives customers confidence. Potential franchisees go through a vetting process which tends to eliminate those unsuited to the job'
New franchisees in property marketing '“ and indeed in all businesses '“ benefit immeasurably from the parent groups marketing (which is usually nationwide) and from their referral systems (if these are applicable), said Clarke.
Equally significantly, he said, they benefit from being able to use tried and tested but simplified, labour saving systems and, in many instances, from having access to round-the-clock advice and support 'just a phone call away'.
Then, too, they will be greatly helped by the franchisors management and staff training services '“ which, in the property sector today, can be the defining factor in determining success or failure.
'Staff receiving this training will stay longer and will appreciate that they are being empowered,' said Clarke. 'In the property sector they will realise quickly that they are in a different league to the part time housewife brigade on whom previously the sector relied '“ but who sometimes achieved only one sale in two months'
The trend in franchising today, said Clarke, is for the original franchise to be split into subsidiary franchises once it has established itself and for the franchisor to establish related ancillary brands '“ in property for example, in letting, auctions and commercial sales franchises.
'It makes good sense to operate two franchises in the same location. Premises and overheads can be shared and the different operations will feed off each other'
Finally, said Clarke, if the franchisee decides to sell after a few years his operation will be 100% more acceptable to buyers when he puts it on the market if it is linked to a big brand.
Clarke predicted that the current blitz by the EAAB on agencies which have ignored certain rules will further reduce the number of independent agencies '“ and further enhance the call for franchises in the property sector.
For further information contact Tony Clarke on 082 789 2752 or email tony@rawsonproperties.com.
